Is risk-off back? Bitcoin, ether dip ahead of next Fed meeting 

Bitcoin slipped below $40,000 for the first time in a month while ether lost 6% Monday

article-image

Artwork by Crystal Le

share

Bitcoin and ether extended losses Monday while stocks traded sideways ahead of next week’s Federal Reserve meeting. 

Bitcoin slipped below $40,000 for the first time in a month, putting the cryptocurrency around 7% lower in the past week. Ether (ETH) similarly faltered, trading around 6% lower over 24 hours on Monday to around $2,330. 

While the launch of bitcoin ETFs coinciding with a decline in bitcoin’s (BTC) price may be perplexing to traders, some analysts attribute some of the decline to outflows from Grayscale’s product, which means the trust is holding less bitcoin. 

Read more: Bitcoin slips to nearly retest $40K even as tech stocks roar

As of Friday, Grayscale’s Bitcoin Trust, which converted into an ETF earlier this month, held just under 567,000 bitcoin, according to disclosures. At the end of December 2023, the trust held around 619,000 BTC. 

Others say cryptocurrency’s general price decline is indicative of a broader risk-off trend as we head into the first Federal Open Markets Committee meeting of the year later this month. The Fed has already signaled that rate cuts may not come as swiftly or aggressively as markets had hoped. 

“This feels like a broad market reset as traders move to de-risk,” Noelle Acheson, author of the “Crypto is Macro Now” newsletter, said. “More volatile assets are being hit even harder, as shown by the climb in bitcoin’s market dominance — when BTC.D heads up as prices head down, we’re seeing a rotation into the relative ‘safety’ of the market’s largest and most liquid asset.”

Read more: GBTC’s asset bleeding to blame for week of flat crypto product flows 

Stocks also struggled to break out Monday, although the S&P 500 and Nasdaq Composite indexes did manage to close the trading session in the green. Analysts say there is reason to believe the early rally we have seen so far this year — the S&P 500 and Nasdaq Composite are up 2.3% and 4% year-to-date, respectively — could continue. 

“[Last week], the actual news was more bad than good, yet stocks rallied and that tells us that momentum is still on the bull’s side, technicals are positive and the path of least resistance is higher,” Tom Essaye, founder of Sevens Report Research, said. 

Essaye cautioned, however, that there isn’t a lot of support right now for equities, and a substantial correction is only one hawkish-Fed comment away. 

“As far as chasing the market at these levels, I don’t think it’s the best time to do so based on the fact that I can’t point to much that will push stocks higher in the medium term other than momentum,” he said. “I can point to numerous events that could cause a 5%-ish correction, quickly.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

article-image

Sam Altman sees our future through the World Orb

article-image

Few US politicians are this clearheaded about Bitcoin

article-image

Pump.fun seemed to kick off buybacks on Tuesday according to onchain analysis

article-image

Stablecoins are a new form of money, with an old kind of limit

article-image

Firedancer has yet to go fully live, but its progress has been “pretty impressive,” a dev said

article-image

House lawmakers support, criticize the GENIUS Act, CLARITY Act and the Anti-CBDC Surveillance Act in Monday hearing